PCG employees are good and moral people who strive every day, trying in the right way, to achieve perfection in their jobs. However, good intentions are not always enough. In order to make good and ethical business decisions, we all need to maintain an awareness of our ethical principles and some examples of how these principles apply on the job. The PCG Principles of Business Conduct serves this purpose. The PCG Principles of Business Conduct applies to all employees of Performance Contracting Group, Inc., its subsidiaries and joint ventures.

PCG LEADERSHIP
Executives, officers, and managers (the leadership) must, at all times, exemplify the highest standards of ethical business conduct and are expected to engrain these same principles and conduct in their employees. Furthermore, the Leadership must maintain a work environment that exacts the same ethical and legal standards from their employees, suppliers, subcontractors and customers as well.

Executives, Officers and Managers shall:

1. At all times conduct themselves as professionals and leaders in a mannerthat is consistent with the intent of PCG’s Core Values;
   
2. Comply with every aspect of PCG’s Principles of Business Conduct;
   
3. Instill within their employees an acceptance of PCG’s Core Values and PCG’s Principles of Business Conduct;
   
4. Appraise their employees annually to assure compliance with PCG’s Core Values and PCG’s Principles of Business Conduct;
   
5. Actively control all Company operations and functions to prevent endangering individuals and to avoid scandal, embarrassment or liability to the Company.

Integrity and reputation are our foundation. Our Core Values and Principles of Business Conduct must define our integrity and our relationship with everyone we do business with (e.g., our customers and suppliers) and each other. Please join me in making PCG and its operating companies the ethical leader in our industries.

Sincerely,

Our philosophy is that Performance Contracting Group, Inc. (PCG or the Company), its subsidiaries and joint ventures will comply with all applicable laws and regulations, adhere to the highest ethical standards, and act as responsible members of the communities where we operate.

Our Principles of Business Conduct (PRINCIPLES) has been prepared to help you understand and honor this philosophy. It has been adopted by the PCG Board of Directors. It summarizes the virtues and principles that are to guide our actions in business. The PCG Principles of Business Conduct applies to all employees of Performance Contracting Group, Inc., its subsidiaries and joint ventures. And to the extent they act on behalf of PCG, we expect our agents, consultants, subcontractors, representatives and suppliers to be guided by them as well. We do not expect you to become a legal expert as a result of reading the PRINCIPLES; the examples included here do not represent every instance where a policy or the law applies. But we do expect you to honor the PRINCIPLES, to be generally aware of certain laws and regulations, and to recognize potentially sensitive issues. Most importantly, we expect you to seek advice when necessary. It is always better to ask first so problems can be avoided later.

There are numerous resources available to assist you in meeting the challenge of performing your duties and responsibilities while honoring the PRINCIPLES. There is no better course of action for you than to apply common sense and sound judgment to the manner in which you conduct yourself. In other words, if you question whether a specific act could be a potential ethical or legal problem, it probably is. Do not hesitate to use the resources that are available whenever it is necessary to seek clarification.

It is your responsibility to be informed about and to comply with the PRINCIPLES.

METHODOLOGY OF IMPLEMENTATION

The PRINCIPLES is distributed or made available to all PCG salaried and non-union hourly employees, agents, consultants, subcontractors, representatives and suppliers. PCG’s managers will receive detailed training on the contents. Managers must ensure full implementation of the PRINCIPLES and its ancillary policies and procedures throughout all PCG locations.

The PRINCIPLES is made available on PCG’s website and will periodically be distributed in written form. Additionally, the Company publishes related articles in its corporate newsletter and includes business conduct items in various branch and division meeting agendas. The PRINCIPLES are reviewed by Senior management to ensure its content remains appropriate and is updated in accordance with new circumstances, laws and regulations.

PCG employees are expected to adhere to the provisions of the PRINCIPLES; those who violate the PRINCIPLES are acting outside the scope of his or her employment, and are subject to disciplinary action.

A value is something for which we stand, allowing no exceptions and something we demonstrate every day of our life. A value is a fixed and immovable point. Values motivate your behavior, and will guide you in your resolution of difficult decisions/situations. PCG’s customers, suppliers and others who interact with the Company deserve consistent treatment from PCG representatives. Therefore, no matter what the personal values of any individual employee, anytime a customer or supplier interacts with a PCG representative, he/she can always count on the same qualities of service and character because all PCG representatives, when acting on behalf of PCG, are “living” PCG’s set of core values. PCG’s core values are:

SAFETY
Webster defines the adjective “perfect” as being “of the highest excellence”… “flawless”. A perfect diamond, a perfect safety record… flawless. In construction, real, inherent risks/dangers exist. We must always strive for zero accidents… flawless, perfect. Not until we have a perfect safety record can we be satisfied. The perfect safety of our employees must be our primary objective and primary culture. We must demand and expect perfection. Remember, safety first, always, every day… nothing less.

QUALITY PERFORMANCE

Play by the Rules:
• Fully use the business tools and systems that the Company has developed for you. Don’t take shortcuts - eventually it will catch up to you and our customers.
• Constantly stay familiar with all corporate policies, particularly all operational policies for managing your business. (PCG’s corporate policies are posted on our Intranet. For assistance in accessing, contact your respective Branch Administrator, Supervisor or Manager.)
• Manage by values.

INTEGRITY

• A company must be trustworthy and honest with those it deals with, both internally and externally.

• It’s simple: “Walk the Talk”. Treat the people you work with and the people you work for in the same professional manner as you would want them to treat you… ethically and with respect, timeliness, and fairness.

TREATING EMPLOYEES EQUITABLY

Our primary role in this Company is to protect/preserve and perpetuate/grow the assets (wealth) of our Company so that it can share its wealth equitably and prudently as possible with all its employees and owners today.

Our priorities for the Company:

1. Employee Satisfaction: Provide attractive salary, bonus and fringe benefits for our employees and their families. We want to continue to rank at the top of our industry in total compensation. Also, create growth opportunity and means for vertical movement and promotion for our people. We want to develop talent from within and give our deserving and qualified people an opportunity to grow personally and professionally within the Company.

2. Stock Appreciation: Moderate and sustained stock appreciation is vital to the Company. Our goal is to continue to provide attractive returns to the shareholders and remain employee-owned.

3. Financial Strength: A strong balance sheet is essential for growth. All our banking and bonding capabilities are tied directly to the strength of our balance sheet.

ENTREPRENEURIAL SPIRIT

Only through growth and responsible financial management will we enjoy continuing prosperity. We must look to all employees and owners to make a difference. All of us should feel comfortable enough to challenge and improve the system by taking reasonable risks outside our comfort zone that will improve and expand our businesses in three ways:

1. Branch-Level Growth: Internal growth from our existing branches; i.e., doing more of the same and expanding into new services for local market-share growth;

2. Division-Level Growth: Geographic expansion of our core businesses; i.e., opening new branch locations; and

3. Corporate-Level Growth: Acquisition of new businesses that will further diversify and strategically position us for where we need to be ten years from now.

CUSTOMER ALIGNMENT

The next major business force to be reckoned with will be rapid access and interaction with customers.

Communications and computer technologies are creating new frameworks for customer management, allowing real¬time integration with the customer and the ability to create and leverage customer information.

Experts all agree that speed, reliability and intimacy matter most. Customers are raising the bar: “Know Me Well; Serve Me Fast; Do It Right Every Time.”

The best salespeople:

• Ask better questions
• Are excellent listeners
• Have empathy for their customer. Know better than your competition the mentality and perspective of your customer. See things through his/her eyes.
• Create a win/win situation for both you and your customer.
• Practice excellent time management to maximize productivity.

FUN COMPANY

We spend the majority of our waking hours in the office and/or otherwise working for the Company. It is vital that we create and maintain a Company culture and atmosphere that has our employees wanting to come to work and wanting to work hard and be successful, but also feeling that the Company has a personal interest in each of us and is concerned for our comfort, our enjoyment, and our welfare.

It is our responsibility to provide a work environment that balances productive work with productive fun

4 ETHICS QUICK TEST
TAKE A QUICK TEST TO EXAMINE YOUR OPTIONS.

PCG wants to earn and maintain its reputation for being trustworthy and for doing the right thing. If you’re ever in a situation where the right thing is unclear or doing the right thing is difficult, examine your options with the Ethics Quick Test:

• Could it harm PCG’s reputation?
• Is it ethical and legal?
• What would my family and friends say?
• How would it look in the newspaper?
• Would I bet my job on it?
• Should I check with someone else?
• How would my action appear to others?

---

5 BUSINESS STANDARDS
COMPLIANCE WITH THE LAW

PCG and its employees identify, understand and honor all applicable laws and regulations, and act in such a manner that the full disclosure of all facts related to any activity would always reflect favorably on the Company.

MAINTAINING HIGH ETHICAL STANDARDS
PCG and its employees honor the highest ethical standards of conduct in all business activities, and act in a manner that enhances the Company’s standing within the business community as a vigorous and ethical competitor.

BUSINESS CITIZENSHIP
PCG and its employees are responsible citizens in the communities where the Company operates.

HONESTY
PCG and its employees are truthful, honest and forthright in all our endeavors.

INTEGRITY
PCG and its employees say what we mean, deliver what we promise, and stand for what is right.

RESPECT
PCG and its employees treat one another with dignity and fairness, appreciating the diversity of our work force and the uniqueness of each employee.

TRUST
PCG and its employees build confidence through teamwork and open, candid communication.

RESPONSIBILITY
PCG’s employees are free to speak up without fear of retribution - and report concerns about the workplace, including violations of law, regulations and Company policies, and seek clarification and guidance whenever there is doubt.

• Conducting periodic and spot audits at its corporate and branch locations;
• Integrating its features within the Company’s salaried employee performance appraisal system:

• to ensure managers take an active role in disseminating its contents to their employees,
• to ensure employees conduct their business affairs with adherence to the provisions of the PRINCIPLES;

• Conducting training seminars on its provisions;
• Evaluating all reports of suspected misconduct; and
• Appropriately disciplining violators.

1. Contact your respective PCG Supervisor, Manager or Vice President of Operations responsible for your branch or department.
   
2. Contact the Senior Vice President of Corporate Affairs, PCG, Inc. at the home office in Lenexa, Kansas (Tel: (800) 255-6866; or (913) 888-8600) or via email to mick.matthews@pcg.com.
   
3. Contact the Senior Vice President/General Counsel, PCG, Inc. at the home office in Lenexa, Kansas (Tel: (800) 255-6866; or (913) 888-8600) or via email to chuck.williams@pcg.com.

Employees may have questions regarding their own actions or the actions of other employees. Questions may also arise regarding the actions of suppliers, subcontractors or customers. You should direct your questions to one of the individuals listed above for clarification and guidance.

If you report, in good faith, what you suspect to be illegal or unethical activities, you need not be concerned about retaliation from others. The Company will take disciplinary action against any employee involved in retaliation. This may include action up to, and including, termination of employment.

PCG "ETHICS HELPLINE"

Performance Contracting Group continues to enhance its initiatives regarding corporate ethics and raising awareness of its Principles of Business Conduct. Effective January 1, 2004, the company will establish its "Ethics Helpline", a telephone service available to all employees. The "Ethics Helpline" is available for questions you may have regarding business ethics, or for reporting instances you suspect may be a questionable business practice, illegal activity, or a crime pertaining to Performance Contracting Group.

All calls will be handled confidentially. When you call the "Ethics Helpline", you may leave an anonymous message or you may choose to leave a direct message for Mick Matthews, senior vice president, Corporate Affairs. The "Ethics Helpline" directions will prompt you to press #1 to leave a direct message for Mick Matthews, or to simply remain on the line to record your voicemail.

Performance Contracting Group is committed to doing business at the highest possible level of integrity and ethical practice. We appreciate your involvement and assistance.

INTERNAL CONTROL GUIDELINES
PCG has established systems, controls and documentation for authorizing, executing, and recording transactions involving assets and liabilities. The Company also controls access to assets and periodically reconciles recorded and existing assets. The following is a summary of some of the more significant aspects:

Compliance
No officer, employee or other person acting on behalf of the Company may engage in any activity that circumvents the Company’s system of internal controls.

Illegal Payments
No officer, employee or other person acting on behalf of the Company may in any way offer, make, solicit or receive an illegal payment, contribution or gift of any kind.

Cash Disbursements
PCG prohibits cash disbursements except for reasonable amounts drawn from established and properly recorded petty cash accounts. All checks must be drawn only to the ultimate payee. No checks may be made payable to “cash” or to “bearer”. Exceptions can be made to this policy, only with the prior written approval of PCG’s Chief Financial Officer.

Reporting and Review Procedures
Any officer, employee or other agent of the Company who thinks a transaction may be illegal must report the suspicion to the Company’s Senior Vice-President of Corporate Affairs, Chief Financial Officer, or General Counsel. If the Senior Vice-President of Corporate Affairs, Chief Financial Officer, or General Counsel believes a further review of the transaction is necessary, he must notify the Chief Executive Officer.

All appropriate persons, including the reporting individual, will be informed as to how the issue is resolved. If the review procedure results in a favorable decision, the transaction may proceed. Similar instances of transactions already completed must also be reported accordingly. PCG will, after a difficult issue has been resolved, consider how the “lesson learned” from its resolution can be used to improve the PRINCIPLES and/or Company policies.

Responsibility
Employees are responsible to know and understand the PCG internal control guidelines that may directly affect them.

POLICY
PCG Company policy requires full compliance with the letter and spirit of all antitrust laws and regulations. No employee, under any circumstances, has the authority to commit or authorize a violation of the law. Anyone who violates the law, or knowingly permits a subordinate to do so, is subject to disciplinary action, up to and including termination of employment.

Each of you must have a basic knowledge of the U.S. federal and state antitrust requirements. Many countries outside of the United States such as Canada, Australia and many European countries have also adopted antitrust laws. Information about antitrust laws outside the U.S. may be obtained from PCG’s General Counsel.

Penalties for antitrust violations are severe. They include the following:

• Imprisonment of individuals.

• Fines of up to ten million dollars ($10,000,000) against the Company, up to three hundred fifty thousand dollars ($350,000) against the individual for each violation of the Sherman Act, and fines of up to ten thousand dollars ($10,000) for each violation of the Federal Trade Act.

• Payment of triple damages, plus attorney’s fees and litigation costs, to the government or any firm or individual injured by the violation.

• Injunctions or consent decrees prohibiting certain activities. Consent decrees can seriously limit a firm’s future freedom to engage in business activity and can be applied across a broader scope than was involved in the original violation.

AREAS OF POTENTIAL EXPOSURE
Violations most frequently occur in relation with competitors, customers, and suppliers.

Relations with Competitors
The laws make illegal any agreement or understanding, expressed or implied, written or oral, that unreasonably restricts competition or interferes with the ability of the free market system to function properly. In the eyes of the law, good intentions or customer or consumer benefits do not justify or excuse violations.

A formal agreement with a competitor need not exist to prove a conspiracy. A general discussion followed by common action often is enough to show an implied agreement. In an investigation, every communication, written or oral, is subject to extreme scrutiny.

Communications with competitors should be avoided unless they concern legitimate business ventures or permitted trade association activities. You must not engage in any communications with competitors that could result, or even appear to result in any of the following: price fixing, bid rigging, allocation of customers or markets, boycotts, or production limits to restrain trade.

Relations with Customers and Suppliers
Generally speaking, you have an unrestricted right to choose your customers and suppliers. But, there are antitrust pitfalls in this area. The biggest danger is an allegation that, through an understanding or threat, you have improperly restricted a customer’s freedom to establish his/her own prices or terms of sale. You must also avoid any agreement with a supplier that sets the price or terms of sale for your products. In addition, you should avoid complaining to your supplier about the prices charged by that supplier’s other customers who are your competitors.

For Specific Guidance
Because of the severe penalties involved and the broad areas of activities that could potentially lead to a violation, all employees are encouraged to request guidance from the General Counsel when antitrust-related questions arise. The Legal Department can provide specific definition and examples of illegal activities pertaining to competitors, customers and suppliers.

1. Anti-bribery provisions.
2. Accounting and record-keeping requirements.

The anti-bribery section prohibits payment of a bribe to a foreign official or foreign political party, party official or candidate for political office. The FCPA defines a “bribe” as anything of value given or offered to a foreign official for the purpose of influencing an act or decision to obtain, retain or direct business. Anything of value can include things other than cash.

Despite the reference to foreign practices, the FCPA’s accounting and record-keeping provisions apply to domestic and international operations of U.S. companies.

While the FCPA’s accounting provisions basically restate GAAP, it is important to understand that strict accuracy in documentation and reporting is required. These provisions can be interpreted to include relatively small sums from petty cash funds. Any director, officer, employee or agent of PCG, or any stockholder acting on behalf of PCG, who is convicted of violating the FCPA is subject to substantial fines and/or imprisonment. If convicted, the Company is also subject to substantial fines.

Corporate Participation
PCG prohibits the use of Company funds or other assets to make political contributions to or expenditures on behalf of political candidates, officeholders or public officials. Prohibited expenditures may include things as small as providing meals, beverages or entertainment to officeholders or public officials. This policy applies even in states where the law permits corporate political contributions or expenditures. U.S. federal law and Company policy also state that no one will be reimbursed for personal political contributions. Personal compensation will not be altered in any way under any circumstances to reflect such contributions.

Gratuities and Government Employees
U.S. federal and state laws and laws in some countries outside the United States restrict the ability of corporations, their employees or their agents to give gifts or gratuities to government employees, including politicians on behalf of the Company. These laws specifically prohibit making a gift to a government employee in connection with a business transaction, procurement and contracting officers, inspectors, auditors, and even local officials who issue permits. These laws could be violated if anything of value is given to a government employee, even if there is no intent to influence an official action or decision. PCG prohibits any employee from making any gift or gratuity, or making any expenditure of any kind, to or on behalf of any government employee.

PCG expects its employees to refuse to make questionable payments. Employees must not offer expensive gifts, bribes or any other kind of payment or benefit to representatives of customers, suppliers, competitors, government or government agencies.

PCG employees must respect and protect any confidential or proprietary information shared with us by a supplier. We must also let our suppliers know that we trust and expect them to do likewise.

Employees engaged in business activities with public entities must be cognizant of and comply with all respective regulations and contractual provisions.

For more information regarding contracts with public entities, employees should contact PCG’s Legal Department.

Employees needing assistance in determining how the rules governing inside information apply to specific situations should contact PCG’s General Counsel.

There are cases, however, where PCG employees may start their own outside businesses, or take on additional part-time work with organizations that are neither competitors, suppliers, nor customers. This in itself does not constitute a conflict of interest. It is the employee’s responsibility to ensure that the second job does not conflict with the interests of PCG. This means, for example, ensuring that the two activities are strictly separated:

• That you do not do the other organization's work on PCG's time.

• That customers and colleagues from your outside activity do not contact you at PCG.

• That you do not use PCG's equipment and supplies, nor te time of any PCG personnel, for your outside work..

• That you do not promote products or services associated with your outside business to other PCG employees during working hours.

• That you do not attempt to market or sell products or services from your outside work to PCG.

In order tyo avoid any uncertainty with PCG as your primary employer, you must let your manager know of and approve the outside work prior to commencing it.

• To provide equal opportunity for all persons in recruiting, hiring, developing, promoting and compensating without regard to race, religion, color, age, gender, disability, veteran’s status or national origin;

• To maintain a professional, safe and discrimination-free work environment; and

• To recognize and compensate employees based on their performance and to provide a competitive array of benefits.

Sexual, racial, ethnic, religious or any other type of harassment has no place in PCG’s work environment. Racial, ethnic and religious harassment includes such conduct as slurs, jokes, intimidation or any other verbal, written or physical attack on a person because of race, religion or national origin. Sexual harassment includes unwelcome sexual advances or other verbal or physical conduct of a sexual nature.

Questions or complaints about potential harassment should be directed to your immediate supervisor, the Senior Vice-President of Corporate Affairs, or PCG’s General Counsel.

For additional information regarding the Company’s Substance Abuse Prevention Program and its Employee Assistance Program, employees should contact the Substance Abuse Prevention Program Manager in the PCG corporate office in Lenexa, Kansas. Employees may review the Company’s Substance Abuse Prevention Program, PCG Policy #176, on PCG’s computer intranet service under the Corporate Information, Corporate Policy Manual headings.

1. Contact the Corporate Safety Department in Charlotte, NC office at (704) 529-8043; or

2. Access the PCG Accident Prevention Plan via the Company's Intranet.

Employees can unknowingly compromise the security and integrity of PCG information through the improper use of Company equipment. Employees using Company equipment for personal purposes are accountable for that use and must ensure that no compromise results.

Employees must ensure that:

• Such materials and equipment remain on Company-controlled property unless use in another location has been authorized by management.

• Proper measures are taken for the storage and safeguarding of Company data and information to prevent unauthorized access, use, or removal by any means and in any form (e.g., electrical, optical, magnetic, or hard copy) of such data or information.

• Company, customer, and supplier resources are not used for outside business activities or unauthorized non-Company purposes.

• Personal use of computing equipment does not compromise the security or integrity of Company information, software, or hardware.

• Resources entrusted to PCG by current or prospective suppliers or customers are used only as authorized by the supplier or customer.

PCG COMMUNICATION SYSTEMS
PCG communication systems and networks are provided for the conduct of Company business. However, personal use by employees of PCG telephones, facsimile machines, and voicemail, email, and internet systems is permitted within the following guidelines:

• The use is of reasonable duration and frequency.

• PCG incurs no significant added costs.

• The use is not related to any illegal activity or the conduct of an outside business.

• The use would not cause embarrassment to the Company.

• The use is not in support of any religious, political, or outside organization activity, except as may have been authorized in advance by the Senior Vice President of Corporate Affairs or PCG’s General Counsel.

• The use does not interfere with the performance of Company business, the employee’s assigned duties, or the assigned duties of other employees and does not adversely affect the performance of the employee or the employee’s organization.

NOTE: Employees are not to make use of the Internet for any purpose that may be illegal or might otherwise embarrass the Company (e.g., pornography, gambling). This includes employees sending e-mails using their PCG account (such that the address that appears to all on the Internet who see it is “john.doe@pcg.com”).

Use of PCG personal computers, copiers, and similar office equipment:

Office equipment, such as personal computers and copiers, is provided for the conduct of Company business. However, occasional personal use of a personal computer, copier, or similar office equipment is permitted within the following guidelines:

• The use should be infrequent and minimal.

• The use must not be related to any illegal activity or the conduct of an outside business.

• The use would not cause embarrassment to the Company.

• The use is not in support of any religious, political, or outside organization activity, except as may have been authorized in advance by the Senior Vice President of Corporate Affairs or PCG’s General Counsel.

• The equipment should be used on an off-hour basis, such as during lunchtime or before or after work hours.

• The use should not interfere with the performance of Company business, the employee’s assigned duties, or the assigned duties of other employees and should not adversely affect the performance of the employee or the employee’s organization.

• There should be no incremental cost to the organization or the cost should be insignificant.

USE OF COMPANY SOFTWARE
PCG employees use software programs for word processing, spreadsheets, data management and many other applications. Most of the software products purchased by the Company are covered by some form of licensing agreement that describes the terms, conditions and allowed uses.

It is PCG’s policy to respect copyright laws and observe the terms and conditions of any license agreement. U.S. copyright law imposes civil and criminal penalties for illegal reproductions and use of licensed software. Each user must be aware of the restrictions on the use of software and must abide by those restrictions. (For information regarding licensing agreements and software use restrictions, employees should contact PCG’s Help Desk in Lenexa, KS at (888) 747-0041 or (913) 310-3559; email: help.desk@pcg.com).